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Kroger Rewards Shareholders With 9% Increase in Quarterly Dividend
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Key Takeaways
Kroger lifts its quarterly dividend to $0.35 per share, marking a 9% increase for investors.
This marks Kroger's 19th consecutive annual dividend hike since reinstating it in 2006.
Kroger projects $2.8B-$3B in adjusted free cash flow for fiscal 2025 to support growth and payouts.
The Kroger Co. (KR - Free Report) has announced an increase in the quarterly cash dividend, which underscores its confidence in the long-term prospects and reaffirms the focus on delivering stable and growing returns to investors. The company has approved a 9% increase in its quarterly dividend.
With this decision, the annual dividend will rise from $1.28 to $1.40 per share. The next quarterly dividend of 35 cents per share will be paid on Sept. 1, 2025, to its shareholders of record as of the close of business on Aug. 15.
This marks the 19th consecutive year that the company has raised the dividend since reinstating it in 2006. Over this period, the dividend has increased at a compounded annual growth rate of 13%. The company reaffirmed its commitment to continue increasing dividends over time, subject to approval by board of directors.
Commenting on this development, Ron Sargent, chairman and CEO, stated that the dividend increase reflects the board’s strong confidence in Kroger’s consistent operating performance and robust free cash flow generation. The company expects an adjusted free cash flow between $2.8 billion and $3 billion for fiscal 2025.
Kroger reiterated its capital allocation strategy, which focuses on using free cash flow to invest in the business for sustainable long-term earnings growth. Additionally, the company remains committed to maintaining its investment-grade debt rating while continuing to return capital to shareholders. Kroger affirmed that it will continue balancing these priorities to drive long-term growth and shareholder value.
How KR’s Dividend Strategy Compares With COST, LOW and TGT
While Kroger continues its 19-year streak of dividend growth, Costco Wholesale Corporation (COST - Free Report) recently raised the quarterly dividend by a notable 12% from $1.16 to $1.30 per share. This increase highlights Costco’s strong cash flow and disciplined financial management. Costco has consistently appealed to investors seeking income backed by robust fundamentals and market resilience.
Lowe’s Companies, Inc. (LOW - Free Report) reaffirmed its shareholder commitment with a 4% dividend hike, bringing the quarterly payout to $1.20. With more than 25 consecutive years of dividend increases, Lowe’s demonstrates reliability and steady capital return. Lowe’s has paid dividends every quarter since 1961, underlining its long-term dedication to income investors.
Target Corporation (TGT - Free Report) has also announced a 1.8% increase in its quarterly dividend to $1.14 per share, marking the 54th consecutive year of dividend growth. This also represents the 232nd straight dividend payment since October 1967, implying Target’s strong commitment to consistent shareholder returns. Target’s first-quarter fiscal 2025 dividend payout totaled $510 million, slightly up from $508 million a year ago.
KR’s Price Performance, Valuation and Estimates
Kroger stock has gained 6.8% over the past three months against the industry’s growth of 13.8%.
Image Source: Zacks Investment Research
Kroger’s forward 12-month price-to-sales ratio of 0.31X indicates a lower valuation compared with the industry’s average of 1.06X. KR carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Kroger’s current financial-year sales and earnings per share implies year-over-year growth of 1.1% and 6.5%, respectively.
Image: Bigstock
Kroger Rewards Shareholders With 9% Increase in Quarterly Dividend
Key Takeaways
The Kroger Co. (KR - Free Report) has announced an increase in the quarterly cash dividend, which underscores its confidence in the long-term prospects and reaffirms the focus on delivering stable and growing returns to investors. The company has approved a 9% increase in its quarterly dividend.
With this decision, the annual dividend will rise from $1.28 to $1.40 per share. The next quarterly dividend of 35 cents per share will be paid on Sept. 1, 2025, to its shareholders of record as of the close of business on Aug. 15.
This marks the 19th consecutive year that the company has raised the dividend since reinstating it in 2006. Over this period, the dividend has increased at a compounded annual growth rate of 13%. The company reaffirmed its commitment to continue increasing dividends over time, subject to approval by board of directors.
Commenting on this development, Ron Sargent, chairman and CEO, stated that the dividend increase reflects the board’s strong confidence in Kroger’s consistent operating performance and robust free cash flow generation. The company expects an adjusted free cash flow between $2.8 billion and $3 billion for fiscal 2025.
Kroger reiterated its capital allocation strategy, which focuses on using free cash flow to invest in the business for sustainable long-term earnings growth. Additionally, the company remains committed to maintaining its investment-grade debt rating while continuing to return capital to shareholders. Kroger affirmed that it will continue balancing these priorities to drive long-term growth and shareholder value.
How KR’s Dividend Strategy Compares With COST, LOW and TGT
While Kroger continues its 19-year streak of dividend growth, Costco Wholesale Corporation (COST - Free Report) recently raised the quarterly dividend by a notable 12% from $1.16 to $1.30 per share. This increase highlights Costco’s strong cash flow and disciplined financial management. Costco has consistently appealed to investors seeking income backed by robust fundamentals and market resilience.
Lowe’s Companies, Inc. (LOW - Free Report) reaffirmed its shareholder commitment with a 4% dividend hike, bringing the quarterly payout to $1.20. With more than 25 consecutive years of dividend increases, Lowe’s demonstrates reliability and steady capital return. Lowe’s has paid dividends every quarter since 1961, underlining its long-term dedication to income investors.
Target Corporation (TGT - Free Report) has also announced a 1.8% increase in its quarterly dividend to $1.14 per share, marking the 54th consecutive year of dividend growth. This also represents the 232nd straight dividend payment since October 1967, implying Target’s strong commitment to consistent shareholder returns. Target’s first-quarter fiscal 2025 dividend payout totaled $510 million, slightly up from $508 million a year ago.
KR’s Price Performance, Valuation and Estimates
Kroger stock has gained 6.8% over the past three months against the industry’s growth of 13.8%.
Image Source: Zacks Investment Research
Kroger’s forward 12-month price-to-sales ratio of 0.31X indicates a lower valuation compared with the industry’s average of 1.06X. KR carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Kroger’s current financial-year sales and earnings per share implies year-over-year growth of 1.1% and 6.5%, respectively.
Image Source: Zacks Investment Research
Kroger currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.